Amazon Prime Day Has Issues, But Still Puts Pressure on Retailers

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Amazon Prime Day is a day of celebration for shoppers. It was created to be a summer Black Friday, where at least one million items’ prices are slashed, with the site promising better deals than these sales in November.

The Hype and the Let-Down

As with anything Amazon does, there was a lot of hype leading up to the 3:00 p.m. Eastern opening. Before the first sale was entered, a prediction of $3.4 billion in revenue was made by Coresight Research (Amazon does not reveal its final numbers for the sale, but experts can infer based on other data). This year’s event has also been extended for a total of 36 hours and is now available in more countries.

Except things did not go as expected for the world’s largest e-commerce site. Instead of a smooth, seamless experience for shoppers, the site went down almost as soon as the sale started. The first two hours were marred with site outages, leaving many Amazon brand fans to take to social media to air their grievances.  Even after a rough go, that had shoppers in a loop or error, Amazon did issue a statement that “some customers are having difficulty shopping, and we’re working to resolve the issue quickly.”

These hiccups will at least have some impact on final numbers, but due to the extended time, they will likely rebound and meet predictions. However, these outages are embarrassing for the largest e-commerce brand in the world.

The “Prime Effect”

Many other retailers are offering Black Friday style deals, too, to reduce Amazon’s impact. Brands like Nordstrom, Macy’s, Target, and Wal-Mart are all pushing their own sales. The “Prime Effect” does seem to be an actual phenomenon, as Moody’s found that retailers with over $1 billion in revenue get an almost 35 percent boost around Prime Day.[1]

Push for New Prime Memberships

It’s also a big push by the e-commerce brand to enroll new Prime members, giving them a preview of what it’s like to be prime with a 30-day free trial. There are incentives for signing up, including a $10 credit at Whole Foods.

Prime membership is certainly still a well-regarded one, as the number of paid members reached 100 million in 2018, CEO Jeff Bezos revealed in a shareholder letter.[2] In the 13 years since Prime’s introduction, it has evolved from a way to get free shipping to a club that everyone wants to be a part of in order to take advantage of videos, movies, and streaming services.

[1] https://www.thestreet.com/world/amazon-prime-day-is-rolling-but-site-outage-could-dent-sales-14652369

[2] https://www.sec.gov/Archives/edgar/data/1018724/000119312518121161/d456916dex991.htm

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